A 9-year-old intact male alpaca (Lama pacos) was examined because of marked enlargement of the left scrotum. Ultrasound examination revealed a thin-walled anechoic structure in the area of the left testis. Aspirated fluid contained spermatozoa, many of which had abnormal morphology. Castration was performed and the left testis was markedly enlarged with a clear fluid-filled cyst. The cyst was lined by a single layer of squamous to cuboidal epithelial cells consistent with those originating from rete testis. The right testis was of a comparable size and shape to that of normal alpaca testis, but the rete testis was mildly to moderately dilated. Additional findings included chronic inflammation of the right testis and epididymis and epididymal fibrosis with ductal hyperplasia on the left. The diagnosis was bilateral cystic rete testis, most likely secondary to chronic inflammation.